Okay. You have received a letter from the PICPA Committee on Professional Ethics ("the Committee") indicating that it has received information that "you may have violated the PICPA Code of Professional Conduct
." What do you do? Stop. Breathe. Remember it is not the end of your world. The Committee’s role is remedial not to punish. If you are doing something wrong the goal is to help you learn and improve and thus protect the public and provide a better service.
For clarification purposes, if you have committed a felony and in some other egregious situations, you will be expelled. However, in these situations you generally have a lot more to worry about than your PICPA membership.
The Committee commonly refers to this letter as the "Opening Letter." The last thing you want to do is ignore this letter. Do not bury your head in the sand and hope this will go away. It will not. Keep in mind that as a member of the PICPA you have agreed to abide by the Code of Professional Conduct
and a part of the Code is that you will cooperate with an ethics investigation. Failure to cooperate is grounds for termination of your membership in the PICPA. Not responding to the committee when it asks for a response and/or further information is failing to cooperate and may lead to expulsion from the PICPA. The good news is that if you do not respond to the first letter there will be a follow-up about 30 days letter giving you another opportunity to respond. The reality is that you will have to ignore numerous opportunities to respond before you will be expelled for non-cooperation.
You generally have thirty days to respond to the Opening Letter. Appropriate responses to this letter include just about anything that demonstrates that you will cooperate. You can ask for more time, you can provide the requested information, and you can ask for a deferral because the underlying matter is in dispute in any court of law and/or if there is an ongoing investigation by another regulatory body (i.e. the SEC). Deferrals are routinely granted and are preferred by the Committee because a member should not have to fight a battle concerning their actions on two fronts at the same time and because any investigation or findings by the Committee should not be used as leverage in any other proceeding. You will eventually have to provide the requested information, even if it is years later after the matter has been deferred during that time (i.e. while you defend yourself from a civil lawsuit). Should you request additional time to respond to the Opening Letter, the Committee will generally work with you, if demonstrate you need extra time.
Once the Committee has the information requested it will review all the information and ask for more information if necessary. It will ultimately decide whether there has been any violation of the Code. The best outcome is a letter from the Committee that based upon the response received that the Committee "has concluded not to pursue the matter at this time." The worst case is expulsion from the PICPA but this does not directly affect your license to practice accounting. Typically, the Committee will recommend CPE’s that will help you learn and understand how to do a better job the next time you under take a similar engagement. Other remedial measures include pre or post issuance reviews, an accelerated PEER Review and restrictions on performing PEER Reviews. Short of expulsion, the Committee also has the authority to suspend a member up to two years and to publicly admonish the member.
Before the Committee will decide anything other than an outright dismissal based upon your initial response you will be offered an interview where you will be given an opportunity to answer questions and present your side of the issues. There are a number of procedural and due process protections. Additionally, members can agree to settle cases rather than undergo a full investigation. Where no settlement agreement is reached the case is heard by the AICPA Joint Trial Board for a decision.
Please let me know if you have any general questions about this topic but if you have a specific matter before the Ethics Committee I cannot address those issues because I represent and advise the Committee on legal issues including due process issues as they may arise. firstname.lastname@example.org